Are there economic laws of socialism?

Monthly Review, July-August, 1985 by Harry Magdoff

Insofar as the laws of motion of capitalism are objective, Marx maintained, the basic course of development of the most industrially advanced country of his time (England) would prove to be true eventually in the case of the less industrialized countries as well. He therefore predicted in the Preface to the first edition of Vol. I of Capital:

Intrinsically, it is not a question of the higher or lower degree of development of the social antagonisms that result from the natural laws of capitalism. It is a question of the laws themselves, of these tendencies working with iron necessity toward inevitable results. The country that is more developed industrially only shows to the less developed the image of its own future.

And indeed this is that did happen--but only in what turned out to be the core countries of the world capitalist system.

But why this uniformity of basic patterns of development in the core countries? Here we come to what is distinct about the economic laws of capitalism--distinct in the sense that arguably in no other social system are the major aspects of economic operations subject to objective economic laws. (Note that we are here referring only to economic laws.) The reason for this is rooted in the very nature of the capitalist mode of production, in which the generalized production and circulation of commodities, a universal market, and anarchy of production are decisive features. Under these conditions, competition among units of capital enforces certain types of economic behavior independent of the will of the individual capitalist (or corporation). It is competition that impels the self-expansion of capital and makes persistent improvement of the means of production compulsory; future to comply puts the capitalist at risk of losing the enterprise. That is why Marx identifies competition as "the essential locomotive force of the bourgois economy," and notes that "competition executes the inner laws of capital; makes them into compulsory laws toward the individual capital, but it does not invent them, it realizes them."

This is not the place to expand on how competition operates, nor to explore the differences between competition under monopoly capital and in earlier stages. But it is important to understand that at all stages of capitalist development competition is the decisive factor in making the laws work. This is surely so in the case of the laws of value, reproduction, centralization and concentration of capital, the creation of a relative surplus population, and the general tendencies of accumulation.

Obviously none of this holds for planned socialist societies. Markets for consumer goods continue to exist. But although what happens in the market may send signals that influence the deliberations of planning bodies, it is still up to the planners at various levels of authority to make the major decisions on the allocation of resources and the program of accumulation. (Yugoslavia does present some exceptions. Analysis of that model, however, needs separate treatment.) The crucial point is that there are no objective economic forces that compel a specific course of economic development independently of the aims and decisions of those who run the system. Which is not to say that there are no objective factors that circumscribe planning options. But these are in the main concerned with natural and technical limits: the size and quality of the labor force, the supply of raw materials, water, power, transportation, communication facilities, and the like, impose severe constraints on what can be produced and distributed.